In June, federal Judge Richard Leon ruled against the Justice Department‘s efforts to block the acquisition of Time Warner by AT&T, and precipitously discouraged the Justice Department from seeking an injunction to delay the merger pending appeal.
Fortunately, Antitrust Chief Makan Delrahim has backbone. The American people did not receive a fair day in court. The appellate court should review the case de novo – re-judge the case in its entirety without reference to Judge Leon‘s findings – or send it back for retrial by another, more temperate judge.
At issue is the purchase of Time Warner’s considerable content franchises – HBO, CNN, TCM, TNT and TBS, as well as Warner Bros. TV and film production studios – by one of the nation’s largest pay TV distributors. AT&T has fiber optic TV distributions in many cities and owns DirecTV.
Such vertical mergers have not been much challenged in decades, although the Justice Department imposed restrictions on Comcast’s business practices when it acquired NBCUniversal in 2011. Those were poorly enforced and the deal, tainted by a Comcast executive’s considerable fund raising for Barack Obama, should serve as no precedent.
The Justice Department maintains AT&T will be able to coerce other cable, streaming and satellite services to pay more for Time Warner networks and content – lest they compete with AT&T’s offering without them.
It’s tough to market a TV bundle without Time Warner’s string of networks, which in some measure may be claimed about the NBC lineup too. In turn, AT&T can use those higher carriage rates to justify higher prices to its own fiber optic and DirecTV customers.
Cable companies and satellite providers like Verizon fiber optic, Comcast and Time Warner Cable, which was spun off as an independent company in 2009 and purchased by Charter Communications in 2016, are scrambling as Americans cut the cord and purchase TV from streaming services like Hulu or independent producers like Netflix.
Leave A Comment